Supply Chain Management Blogs by Members
Learn about SAP SCM software from firsthand experiences of community members. Share your own post and join the conversation about supply chain management.
Showing results for 
Search instead for 
Did you mean: 
Active Contributor
In my previous blog SAP Integrated Business Planning (IBP) overview and its features presented. This blog dedicated to sales and operation planning process.

Defining S&OP /IBP ...What Is it Really?

Planning Horizons and Detail Levels.

What is Integrated Business Planning?

“Integrated Business Planning (IBP) is the business planning process for the post-recession era, extending the principles of S&OP throughout the supply chain, product and customer portfolios, customer demand and strategic planning, to deliver one seamless management process.

What Is S&OP…Really?

A process led by senior management that evaluates and revises time-phased projections for demand, supply, product and portfolio changes, strategic projects, and the resulting financial plans over the mid to long-term planning horizon.

  1. S&OP is a monthly management process that ensures that the company is focused, aligned, and engaged in those efforts the management team collectively decides are the priorities of the enterprise

  2. S&OP deals with the continuous change that occurs in the business and is a process to effectively manage ongoing change. In practice, it is called a re-planning process.

  3. S&OP is owned by the GM or CEO. It is a cross-functional process and includes all the functions of the company. Correctly implemented, it is a demand and strategy-driven process.

  4. S&OP addresses the management of key company resources in support of anticipated customer demands and expectations, new product development, and company initiatives

  5. S&OP provides senior management control of the business. It is sophisticated simplicity resulting in an organized common sense.

Value of a Mature Sales & Operations Planning Process

Classic or Traditional or Academic S&OP or IBP

Phase 1: Product/Portfolio Review

  1. Where are we in the product lifecycle(s)?

  2. What are the competitive pressures?

  3. How are our product(s)/families performing compared to projections?

  4. What products are phasing out?

  5. What new products are planned?

  6. Conducted by senior product person. Participated in by individual contributors from the product, engineering, brand management and middle management representatives from all disciplines

Phase 2: Demand Review

  1. Everyone Participates. Senior revenue person conducts

  2. All Inputs are Valuable

  3. Consensus Means Consensus

Phase 3: Supply Review

  1. Produce/procure on schedule

  2. Produce /procure at the lowest reasonable cost

  3. Manage capacity

  4. Produce to forecast, order

  5. How do I buffer for variability?

  6. Conducted by senior supply chain person, Participated in by individual contributors in supply chain and middle management representation from all areas

Step 4: Reconciliation Review

  1. Compromises and concessions made

  2. Performance reports (KPI measurements) reviewed and supporting documentation prepared

  3. Recommendations documented and prepared for management decision

  4. Agenda for Management Business Review prepared

  5. Conducted by the S&OP process owner and participated in by middle management

Step 5: Management Business Review

  1. KPI review: < 30 minutes

  2. Recommendations reviewed and decisions made

  3. Conducted by the S&OP/IBP process owner and participated in by senior management as decision makers and middle management representatives from each discipline. Owned by Executive Management

  4. An approved plan is to be released to  execution

The Supply Chain Planning Maturity Curve

S&OP at SAP - What Specific problem are we solving?

  1. Plan across the organization in time

  2. Don't have the right information

  3. Can't easily test assumptions


  • Miss the quarter

  • Lose market share

  • Miss growth opportunity

Sales & Operations Planning Enabling Architecture

Sales & Operations Planning: Unified Planning Environment

  1. Single unified data model across Demand, Finance, Supply Chain to support both tactical and operational planning at any level of granularity & dimension

  2. Flexible process modeling

  3. Planning, Analytics and Collaboration driven off of this single model

Sales & Operations Planning: Scenario Planning and Simulations

Real-Time Planning & Simulation

  1. Consensus demand planning, rough-cut capacity planning, volume and revenue modeling

  2. Alternative what-if scenarios for rapid decision-making across multiple key figures and dimensions

  3. Constraints at both detailed and aggregate level, real-time aggregation and disaggregation

  4. Use parameter driven solvers to optimize plans and resolve issues

Sales & Operations Planning: Collaboration

Contextual Process Orchestration

  1. Contextually organize People, Documents, S&OP Process Steps, S&OP Data, Action items, Decisions, Alerts, etc. around the S&OP Process

  2. Define and orchestrate the S&OP process(s)

  3. Enable People to stay on top of relevant, contextual updates

Sales & Operations Planning: Visibility

Advanced Analytics

  1. Evaluation of multiple levers to shape profitable demand

  2. Faster identification of problems through better visualization

  3. Compare scenarios, track KPIs, monitor trends across multiple dimensions, granularities in real-time

  4. End-user personalization and sharing

Sales & Operations Planning: Enabling SIOP

  1. Achieve the Right Balance Between Inventory & Service Levels & Working Capital.

  2. Embed Optimized Inventory Targets into the Supply  Plan for S&OP

  3. Account for Variability in the Supply Chain

Sales & Operations Planning: Key Capabilities

  1. Process Orchestration – Define and manage your S&OP process(es)

  2. Version and scenario creation and management for simulation and what-if analysis

  3. Perform multi-level supply planning (Heuristic & Optimizer)

  4. Collaboration - Define and user groups, tasks, feed posts, and content ▪Alerts - Configure alert key figures for management by exception.

  5. Create historical copies of plans with plan snapshots

  6. Alerts- configure alert key figures for management by exception

  7. ABC segmentation calculations

  8. Configure and change the model and calculations

  9. Business network collaboration integration (maturity level 4+)

  10. Incorporate optimized inventory targets in supply plan (SIOP)

  11. Product Life Cycle (phase-in, phase-out)

Unified planning process flow: Internal and external processes

IBP for sales and operations - Demand Review: Process flow

IBP for sales and operations - Supply review - Heuristic: Process flow

IBP for sales and operations - Supply review - Heuristic: Process flow

IBP for sales and operations - Reconciliation review: Process flow

IBP for sales and operations - Management business review: Process flow


Summary: SAP Integrated Business Planning for Sales and Operations Planning


Best Regards,

Labels in this area